In this article, I provide a comparative historical account on the debate of whether corporations should exclusively be run by the company in the interest of shareholders, or whether managers should be permitted or required to take the interests of others groups (stake-holders) into account. The comparison focuses on the US, Germany and France and traces the debates through the most important formative periods of these countries' corporate governance systems.

It is generally assumed that shareholder primacy has a stronger following in the US and the UK than in Continental Europe, where the stakeholder view is thought to be more influential. Without doubt, the respective political histories and cultures of these countries have influenced this divergence. Without ignoring the significance of these factors, this article emphasizes a core issue that has so far been largely overlooked in comparative analysis. I argue that the respective historical debates exhibited important differences that can be attributed to the shareholder-manager balance of powers and differences in stock ownership structure across countries. Scholars in the US, Germany and France were therefore arguing about different issues due to different economic circumstances, which is why it is problematic to equate adherents of shareholder primacy or a stakeholder view of the firm with their counterparts in other corporate governance systems.

In the US, Berle and Means famously identified the prevalence of a strong separation of ownership and control in 1933. US-style dispersed ownership has always generated debates about the question of how to best address what is today described as an agency cost problem, but also to what extent managerial power is legitimate.

By contrast, larger blocks of share ownership prevailed around 1930 in Continental Europe, as they still do today. Participants in the German and French debates were therefore concerned with issues of controlled companies and corporate groups, which undermined the power of the board of directors. At the same time, the comparatively strong influence of shareholders raised other concerns that were rarely an issue in large US corporations, such as blockholders' private benefits of control and conflicts between competing groups of shareholders that arguably harmed business development. Institutional theories of the corporation, which are traditionally hospitable to stakeholder concerns, seemed to provide a defense of the corporation against its shareholders.

The different nature of the main issues put pro-management and pro-shareholder on different sides of the shareholder-stakeholder debate on the two sides of the Atlantic. In the US, reformers typically had the goal of limiting the power of management to the benefit of shareholders, thereby "taming" the large corporations, whose power was (and is) often identified with that of top management. In France and Germany, critics of the prevailing allocation of control advocated an institutional theory of the corporation to protect the "business in itself" in Continental Europe, and by proxy, its stakeholders from destructive shareholder influence. Continental critics of the status quo therefore sought to limit allegedly excessive influence of shareholders and capital on corporate management.